NZ shares rise, led by Telecom amid fiscal cliff optimism
New Zealand shares rose yesterday, led by Telecom as equity markets worldwide took heart from signs of progress on fiscal cliff talks in Washington that may help the US economy avoid recession. Tech stocks Diligent Board member Services and Xero both made new highs.
The NZX 50 Index rose 12.76 points, or 0.3%, to 3979.25. Within the index, 19 stocks rose, 23 fell and eight were unchanged. Turnover was $928 million, reflecting Fairfax Media's sale of 51% of Trade Me.
Japan's Nikkei 225 Index led gains in stock markets across Asia, rising 1.1%. That follows a 1.2% gain in the Standard & Poor's 500 Index yesterday after a meeting between US President Barack Obama and House Speaker John Boehner at the White House and signs the two sides may be willing to compromise to avoid some US$600 billion of tax hikes and spending cuts scheduled to start Jan. 1.
Telecom rose 4.4% to $2.25, the highest in more than a week. Contact Energy, the biggest power company on the exchange, rose 1.6% to $5.09.
"What's really pushed our market into positive territory is Telecom, which is a proxy for the NZX and one international investors are buying," said Greg Easton, an adviser at Craigs Investment Partners. The White House talks show "there's dialogue and that's better than last time."
Diligent, which sells software to help company directors keep track of meetings, rose 2.7% t to $5, a record close. The shares have soared 144% this year. Xero, the cloud-based accounting service, rose 0.7% to $7.70, matching the record close it reached on Dec. 3, and is up 175% this year. Shareholder and company chief Rod Drury was today named as the NZ Herald Business Leader of the Year.
Fletcher Building, the biggest company on the exchange, fell 0.5% to $8.10. The company today named Nick Olson as chief financial officer, luring him across from the same role at Telecom. Current Fletcher CFO Bill Roest will retire in 2013.
NZ Refining, which departs from the NZX 50 at the end of this week, rose 3% to $2.42, recovering from yesterday's slide. Summerset Group fell 1.4% to $2.20 and Metlifecare fell 1.6% to $3.05. The two rest home operators join the NZX 50 at the end of the week.
Hallenstein Glasson Holdings, the clothing retailer, rose 2% to $5.22.